Monday, September 28, 2009

According to an article published in the Journal of Consumer Research, Americans who believe in rugged individualism and the frontier myth see an H2 as John Wayne on wheels. “As we studied American Hummer owners and their ideological beliefs, we found that they consider Hummer driving a highly moral consumption choice,” the authors wrote. “For Hummer owners it is possible to claim the moral high ground.”

The same research found that "The moralistic critique of their consumption choices readily inspired Hummer owners to adopt the role of the moral protagonist who defends American national ideals."

That is to say, all the haters flipping the bird at these bankruptcy tanks are only calcifying their owners' beliefs that they're defending the Real America.

With that in mind, then, I'd like to offer some more effective talking points for our discussions with Hummer drivers:

"Great, another loser driving a General Motors bailout-on-wheels. Get a job and stop wasting taxpayer money!"

UPDATE: I just looked into the Maine data, which is even more striking.

In 2007, 78.3% of Cumberland County's workers commuted to work by driving alone.

In 2008 , though, that figure declined to 75.4% - almost three full percentage points.

Keep in mind that there are substantially fewer workers in Cumberland County this year as well, so these figures understate the actual number of cars that aren't driving during rush hours anymore. The people who are still employed are carpooling and using transit more:

The number of carpooling workers in Cumberland County spiked from 8.6% in 2007 to 10.3% in 2008.

The number of people using public transportation to get to work in Cumberland County also increased, from 1.1% in 2007 to 1.3% in 2008.

It's impossible to make a solid conclusion from this data alone, but a hypothesis that's at least consistent with this information is that workers who have better access to transit options are also more resilient against unemployement. If you live in-town, near a bus route or near other coworkers, you're also more likely to live close to a greater number of job opportunities. Conversely, workers who live out in the boondocks, and are saddled with high transportation costs, face a steeper battle in finding new jobs.

Tuesday, September 15, 2009

Detailed images and simulated animations for the three concept designs for Franklin Street are now online at franklinstreet.us. The Committee that's refined these three concepts is now accepting public input and thinking about "phase II" - a detailed design and planning process focused on one design scheme, which will probably cobble together the best elements from these three concepts.

Below, a view of the "urban street" concept, looking towards the harbor from the corner of Cumberland Avenue and Franklin Street. This concept would replace the southbound leg of the current Franklin Arterial with redevelopment along the eastern edge of Lincoln Park:

An important unanswered question about all three concepts is how the city can afford to build any of them. While the infill development surrounding the new street would be built by private developers, who would buy the land from and pay future property taxes to the city, the private development won't happen until the City pays the up-front construction costs of the new, improved Franklin Street. And with a project scope that includes several new intersections, extensive excavation work, and miles of new sidewalks, that construction project is likely to cost well over ten million dollars.

That sounds expensive, especially in this fiscal environment. But there are a couple of important factors to keep in mind: first, this is a federally-designated highway (Route 1A) and is therefore eligible for federal funding. In fact, in other similar projects, Washington has paid up to 80% of the total construction costs, leaving the remaining 20% to local and state governments.

Second, the redesigned Franklin Street is going to open up acres of very valuable land for redevelopment. Much of that land is already owned by the City of Portland.

And third, even land that's privately-owned, and blocks away from Franklin Street, is going to become more valuable once the new, improved Franklin Street improves access between downtown, the Old Port, Bayside, and Munjoy Hill. As those properties increase in value, they'll contribute more money to the city's property tax revenues, and become more attractive for higher-value redevelopment.

Taking these three points together, then, we can form a hypothetical scenario in which the Franklin Street project could actually make a lot of money for City Hall. Suppose the City endorses a Franklin Street concept that would cost $20 million (a conservatively high estimate), but would also open up 4.5 acres of publicly-owned land for redevelopment (by way of comparison, the entire Top of the Old Port Parking Lot is a bit less than 3.5 acres; it's privately-owned, but the city owns all of the empty space in the existing Franklin Arterial median, and the City's Housing Authority owns a lot more underutilized land along to Franklin Street in Bayside).

Let's say the Federal government agrees to pay 80% of the cost of the construction, since this is a marquee economic development project that will improve mobility and livability, and the fact that it has the support of Maine's swing-vote senators doesn't hurt. And let's also assume that Portland's State House delegation flexes some muscle and gets Augusta to pitch in 10% of the project's cost from the state's gas tax revenues.

That leaves 10% of the cost - $2 million - remaining. That portion of the costs would easily be covered by sales of City-owned land along Franklin Street.

Where Franklin meets Middle Street, the old Jordan's Meats factory recently went back on the market (in a recession) for a list price of $4.75 million. That's a two-acre parcel of land, and even though there's a building there it will probably be torn down by the new owners. That means the land in that neighborhood - adjacent to the Old Port and the India Street neighborhood - is worth about $2 million an acre. And, coincidentally, the City and the County, together, own about an acre of land within two blocks of that site. The County's land, next to the Courthouse and Lincoln Park, would be particularly valuable for law offices and was even proposed as the site of a high-rise office tower two years ago.

In addition to the land near Newbury Street, the City owns about three acres of underutilized "parkland" on the east side of Franklin near Oxford Street, and in the empty median strip next to Franklin Towers, plus another acre of land in various Portland Housing Authority parking lots. This Bayside real estate is less valuable than land near the Old Port, and some of this acreage might be preserved as the highly-productive Oxford Street Community Farm. Still, in order to invite new vitality into East Bayside, the City could offer up 2 acres of its land near Oxford Street for redevelopment, and net another million dollars for construction and redevelopment efforts.

Furthermore, once Franklin gets rebuilt and the City's properties are sold, the City will enjoy new property tax revenues. If the city sells 4.5 acres to private developers, and that land is worth (on average) $4.5 million, the City will immediately begin collecting an extra $120,000 in additional property tax revenues - enough to hire two more teachers in local schools.

And once private developers start building multi-story buildings on that same land, the assessed value of those properties will double or triple, along with the city's revenues.

In sum: with typical matching funds from the State and the federal governments, plus real-estate investments from the private sector, the City should easily be able to rebuild Franklin Street. And doing so is likely to add millions of dollars to the revenues side of its balance sheet.

Monday, September 14, 2009

Last summer, when gasoline prices hit $4 a gallon, the driving factors behind the price-spike were supply (the world's oil resources are limited and the remaining oil is increasingly expensive to extract) and demand (on top of growing consumption in the U.S., the economies of China, India, Brazil, and other emerging economies were growing at a breakneck pace, and sucking up an increasing portion of the world's oil supplies).

Then the global recession happened, and oil prices settled down - but still nowhere near the levels where they had been in the 1990s. You might recall that some people blamed "speculators" on last summer's price spike. The recession, I think, proved the falsity of that claim: through the depths of last fall's credit freeze, "speculators" with any cash to spare were few and far between (and its unlikely that the few that remained would have bothered with oil futures). Yet oil prices, adjusted for inflation, still remained much higher than they were in 1998, the peak of the Clinton-era boom.

So where do we stand now, looking toward recovery? Don't look now, but gasoline prices are creeping up towards $3 a gallon again. On the supply side, some new oil discoveries represent the payoff from increased exploration from the days when prices were sky-high. But those new discoveries are still hard to get to, and the oil is going to be expensive to extract.

On the demand side, lots of unemployed people stopped driving and almost everyone resolved to drive less to save money in the United States this past year, and consumption dropped a few percentage points. But while we were taking a breather, emerging Asian economies continued to grow at a breakneck pace - the global credit crisis registered only as a brief dip on their GDP growth charts, and now they're growing as fast as ever.

So where does that leave us? On the supply side, the global "pie" of oil supplies is a little bit larger, provided the customers are willing to pay more for their slices. But on the demand side, countries like China, India, Russia, and Brazil are gobbling up a lot more oil.

So when our economy returns to "normal", and if we go back to the gas pumps to consume as much oil as we did in 2007, we're going to have to pay a lot more for it, because hundreds of millions of people in the developing world are also making bids to buy this limited resource.

"It's pretty clear that the 2007 level will be the peak in [domestic] gas consumption for a long time to come, if not forever," says Ed Morse, the former head of commodities research at Lehman Brothers and now a managing director at Louis Capital. Goldman Sachs expects the nation's gasoline demand to fall 0.5% in the second half, tick up 1% in 2010, then remain flat in 2011, as supplies tighten and prices stay high.

This has important implications for state highway agencies, which rely on per-gallon gas taxes for their budgets. If gas consumption is declining or flat, that means there's going to be less money available for highway construction - even as construction costs continue to increase. Raising gas taxes will only serve to depress demand even further, and cause more people to drive less as a way to save money.

States like Maine will increasingly have trouble maintaining existing roads, and building new roads (and increasing our maintenance costs even further) will be out of the question entirely.

That's the fiscal reality. But it's anyone's guess when the alternate-universe space-cadets in Augusta, who are still planning to spend hundreds of millions of dollars on freeway widenings, will get the message.

Thursday, September 3, 2009

These are photos of the display boards that were being shown at last night's public meeting in City Hall. In addition to these, MRLD had also produced a really neat 3-D animation of the three concepts - hopefully they'll be able to put those videos online soon. All of these alternatives have 4 lanes from I-295 to Congress, and 2 lanes from Congress to Commercial.

The Portland Press Herald published a preview of the alternatives (shown at right) in last Saturday's paper. Members of the public will have a chance to mix-and-match their favorite design elements from each of the three choices, ask questions of the Committee, and learn about the project's next steps at this evening's presentation.

Portland Maine Bike Map

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